Summary
In Gosman v. Pfistner, supra, which was a suit for specific performance where the record title to land showed a conveyance by the trustee to a third person and a reconveyance to the trustee individually, the court refused to compel the purchaser to take the title.
Summary of this case from Breitman v. JaehnalOpinion
06-24-1912
GOSMAN v. PFISTNER.
J. H. Harrison, of Newark, for complainant. Spaulding Frazer, of Newark, for defendant.
Bill for specific performance by John W. Gosman against Henry Pfistner. On final hearing. Decree for defendant.
J. H. Harrison, of Newark, for complainant.
Spaulding Frazer, of Newark, for defendant.
HOWELL, V. C. This is a bill for the specific performance of an agreement to convey real estate. The defendant objectsto the title tendered by the complainant for the reason that it is not a marketable one, and he relies upon the title deeds for a demonstration and defense of his position. There are three tracts described in the agreement, as to one of which there is no objection; as to the other two the objections are as hereinafter stated. For the sake of convenience I will refer to these two as tracts "A" and "B."
The record, shows that prior to June 3, 1876, one William Nelson held a mortgage on tract A, which mortgage after his death was foreclosed. At the foreclosure sale the land was bought in by the executors and trustees under his will and the title taken from the sheriff to them as such executors and trustees on the date last named. No other step occurs in the transaction until August, 1906, during which time two of the executors and trustees died, leaving Thomas Nelson as sole surviving executor and trustee. On the last-named day he in his capacity of executor transferred the title to William H. Robinson, who in turn transferred it back to Thomas Nelson individually; both deeds being in consideration of $1 and other valuable considerations. Thomas Nelson subsequently died leaving a will by which he gave to his executors a power of sale of his real estate, by virtue of which power they conveyed the premises in question to one Klimbach, who conveyed to the complainant, Gosman. The question in regard to this tract is whether enough appears upon the record to make the title unmarketable. It was held in the leading case of Smith v. Drake, 23 N. J. Eq. 302, that, if an administrator or other trustee directly or indirectly should purchase lands at a sale made by himself as such, the sale would be set aside on application of the parties interested. In that case an administrator sold lands at public auction and obtained therefor a fair price, but the property was bid in for himself by one of his friends. The sale was set aside and an accounting ordered upon the ground that the administrator became a constructive trustee for the parties in interest.
A purchaser of land is bound by constructive notice of what appears in the antecedent title deeds. Here is a disclosure by these documents that Thomas Nelson held the title to the land in question as trustee under his father's will for 30 years, and that he then procured the land to be conveyed to himself. This is notice to the defendant of an irregularity which might affect the title to the lands. The case of Tillotson v. Gesner, 33 N. J. Eq. 313, is almost on all fours with the case in hand. That was a case for specific performance in which it appeared that there was a conveyance of land voluntary on its face made by a defendant in a suit just before a judgment for a large sum was rendered against him, which would have been a lien on the land if such conveyance had not been made. Specific performance of the agreement was not enforced upon the ground that there was apparent upon the face of the papers a situation which might subject the purchaser to litigation and make the title doubtful, and that if the title to land be doubtful equity will not compel the defendant to take it and so expose himself to the hazard of litigation. Upon this theory courts of equity have frequently declined to compel a purchaser to accept a title which, though questionable, the court believed to be good. The case cited was followed in this court by Cornell v. Andrews, 35 N. J. Eq. 7, and affirmed by the Court of Errors and Appeals in Van Riper v. Wickersham, 77 N. J. Eq. 232, 76 Atl. 1020, 30 L. R. A. (N. S.) 25, Ann. Cas. 1912A, 319, and Doutney v. Lambie, 78 N. J. Eq. 277, 78 Atl. 746. The effect of the constructive notice is discussed in Smith v. Vreeland, 16 N. J. Eq. 198; Spielmann v. Kliest, 36 N. J. Eq. 199; Jennings v. Dixey, 36 N. J. Eq. 490; Condit v. Bigalow, 64 N. J. Eq. 504, 54 Atl. 160; Roll v. Rea, 50 N. J. Law, 264, 12 Atl. 905; Schwoebel v Storrie 76 N. J. Eq. 466, 74 Atl. 969. I am therefore driven to the conclusion that the record title contains a notice to any purchaser that the title to the land in question might become subject to litigation to which he could be made a party on the ground of notice.
It was held in Starkey v. Fox, 52 N. J. Eq. 758, 29 Atl. 211, and afterwards affirmed by the Court of Appeals, that a Court of Equity would presume, after the lapse of a long period of time, that the trustee had accounted to the beneficiaries and that all claims against him were barred by long delay; but that case is not authority for the position taken by the complainant here. In this case it appears that Thomas Nelson held the title in his fiduciary capacity until 1906, and that his breach of trust, if breach of trust it was, began at the time when he caused the land to be conveyed to himself. This is but eight years ago, and it could hardly be said that sufficient time had elapsed to bar claims under the authority of Starkey v. Fox, and so that case is differentiated from this, and still leaves the matter in such doubt as that the court ought not to force the title on the defendant.
Lot B is in a different class. There the objection is to a tax title outstanding in the name of a third person. No entry has been made under it within 20 years last past, so that the common-law limitation has run against it. The title therefore to lot B cannot be deemed doubtful. Beatty v. Lewis, 68 Atl. 95.
Although two of the lots are unobjectionable, the court cannot compel the defendant to accept them. He bargained for the three lots by one contract and at an inclusive price, and he cannot be driven totake a part only; he has the right to all or none.
I will advise a decree in accordance with these views.